Significant changes are coming to France’s real estate market with the zero-interest loans (Prêt à Taux Zéro, PTZ) expansion for new homes, effective from April 2025.
In a significant development for the French real estate landscape, the government has announced that the extension of zero-interest loans (Prêt à Taux Zéro, PTZ) will take effect on April 1, 2025. This initiative aims to broaden access to financing for first-time homebuyers across the entirety of France, encompassing both individual and collective housing units.
The salient features of this policy shift are as follows:
- Nationwide Accessibility: From the designated date, the PTZ will be available to first-time buyers throughout the country for the acquisition of new properties. In contrast, the existing stipulations for older homes—those constructed over five years ago—will remain intact, permitting PTZ eligibility only in designated relaxed zones, contingent upon the completion of energy renovation work.
- Inheritance Tax Exemption: In a bid to further incentivize homeownership, first-time buyers will enjoy an exemption from inheritance tax on donations up to €300,000, specifically earmarked for new property purchases. Additionally, the notary fees associated with these transactions will remain unchanged, providing a modicum of financial relief.
- Ministerial Initiatives: Valérie Létard, the Minister of Housing, has initiated a comprehensive study aimed at evaluating the taxation framework for private landlords. This analysis will scrutinize the profitability of rental investments, which have been perceived as less favorable compared to other financial avenues, such as equities. Among the potential reforms under consideration are a tax allowance, a depreciation scheme, and a unified flat-rate levy of 30%, mirroring the “flat-tax” model applied to financial investments.
- Rent Control Considerations: Another pivotal aspect of the housing policy discourse is the impending examination of rent control measures. A dedicated mission will be launched to assess the impact of these regulations within a reference territory, with the objective of providing empirical data to inform future decisions regarding the potential extension of such measures beyond 2026.
These newly instituted measures signify a paradigm shift in France’s housing policy, striking a delicate balance between bolstering support for prospective buyers and critically evaluating the economic viability of rental investments. As the landscape evolves, stakeholders will undoubtedly be keenly observing the ramifications of these policies on the broader real estate market.
